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Case 2:15-cv-01045-RFB-PAL Document 314 Filed 10/19/16 Page 1 of 18 1 2 3 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 * * * CUNG LE, NATHAN QUARRY, JON Lead Case No.: 2:15-cv-01045-RFB-PAL 7 FITCH, et al, ORDER 8 Plaintiffs, Member Case Nos.: 9 v. 10 ZUFFA, LLC, d/b/a ULTIMATE FIGHTINGCHAMPIONSHIP and UFC, 11 12 Defendant. 13 KYLE KINGSBURY AND DARREN Case No.: 2:15-cv-1046-RFB-PAL 14 UYENOYAMA, on behalf of themselves and all others similarly situated, 15 16 Plaintiffs, 17 v. 18 ZUFFA, LLC, d/b/a Ultimate Fighting Championship and UFC, 19 Defendant. 20 21 LUIS JAVIER VAZQUEZ and DENNIS Case No.: 2:15-cv-01055-RFB-PAL LLOYD HALLMAN, on behalf of 22 themselves and all others similarly situated, Plaintiffs, 23 v. 24 ZUFFA, LLC, d/b/a Ultimate Fighting 25 Championship and UFC, 26 Defendant. 27 28 Case 2:15-cv-01045-RFB-PAL Document 314 Filed 10/19/16 Page 2 of 18 1 BRANDON VERA and PABLO GARZA, on Case No.: 2:15-cv-01056-RFB-PAL behalf of themselves and all others similarly 2 situated, 3 Plaintiffs, 4 v. ZUFFA, LLC, d/b/a Ultimate Fighting 5 Championship and UFC, 6 Defendants. 7 GABE RUDIGER and MAC DANNZIG, on Case No.: 2:15-cv-01057-RFB-PAL 8 behalf of themselves and all others similarly situated, 9 Plaintiffs, 10 v. 11 Zuffa, LLC, d/b/a Ultimate Fighting 12 Championship and UFC, 13 Defendants. 14 15 I. INTRODUCTION 16 Before the Court are identical Motions to Dismiss (ECF Nos. 64, 16, 30, 16) in the instant 17 case and member cases 2:15-cv-01046-RFB-PAL, 2:15-cv-01055-RFB-PAL, 2:15-cv-01056- 18 RFB-PAL, and 2:15-cv-01057-RFB-PAL, as well as a Stipulation re: Discovery of Electronically 19 Stored Information (ECF No. 160). For the sake of clarity, the Court will refer to the Motion to 20 Dismiss as ECF No. 64 in the lead case, Case No. 2:15-cv-01045-RFB-PAL. For the reasons 21 discussed, the Court DENIES the Motion to Dismiss (ECF No. 64) and GRANTS the Stipulation 22 re: Discovery of Electronically Stored Information (ECF No. 160). 23 24 II. BACKGROUND 25 A. Factual Background 26 The following allegations are common to all five cases against Defendant Zuffa and are 27 drawn from the Plaintiffs’ Complaint (ECF No. 1) in Case No. 2:15-cv-01045-RFB-PAL. 28 - 2 - Case 2:15-cv-01045-RFB-PAL Document 314 Filed 10/19/16 Page 3 of 18 1 Plaintiffs are Elite Professional MMA Fighters (“Bout Class Plaintiffs”) and those fighters 2 called “Identity Plaintiffs” (collectively, “Plaintiffs”). Plaintiffs bring this action against Defendant 3 Zuffa, LLC, who operates under the trademark Ultimate Fighting Championship or “UFC.” The 4 UFC, which (through the conduct alleged herein) now controls approximately 90% of the revenues 5 derived from live Elite Professional MMA bouts, promotes and distributes professional live MMA 6 bouts through various venues, in the U.S. and internationally. Compl. ¶ 7. 7 Plaintiffs bring antitrust action under Section 2 of the Sherman Act, 15 U.S.C. § 2, for 8 treble damages and other relief arising out of Defendant’s overarching anticompetitive scheme to 9 maintain and enhance its (a) monopoly power (the “Relevant Output Market”) in the market for 10 promotion of live Elite Professional mixed martial arts (“MMA”) bouts, and (b) monopsony power 11 in the market for live Elite Professional MMA Fighter services (“Relevant Input Market”). Compl. 12 ¶ 1. The relevant geographic market for both the Relevant Input Market and Relevant Output 13 Market is limited to the United States and, in the alternative, North America. Id. 14 1. Input Market 15 By dominating the market for live Elite Professional MMA Fighter services through the 16 scheme alleged herein (including through long-term exclusive agreements with MMA Fighters 17 and other exclusionary and anticompetitive acts), the UFC controls the talents of Elite Professional 18 MMA Fighters, who are popular with national audiences. Id. at ¶ 5. 19 The UFC denied actual and potential rivals necessary inputs to run effective professional 20 MMA Promotion companies, raising their costs and making it impossible for them to compete 21 effectively. As a result of the UFC’s exclusionary scheme, multiple actual or potential rivals were 22 forced to sell to the UFC or exit the market entirely. Id. ¶ 11. 23 By following no objective ranking or title criteria, the UFC is able to exert control over its 24 roster of athletes who risk losing the opportunity to be afforded “title bouts” or to earn a living as 25 an MMA fighter. Id. ¶ 17. 26 2. Output Market 27 Defendant acquired and maintained monopoly power in the Relevant Output Market 28 through a series of exclusionary acts, including (a) direct acquisitions of actual or potential rivals - 3 - Case 2:15-cv-01045-RFB-PAL Document 314 Filed 10/19/16 Page 4 of 18 1 (who were forced to sell to the UFC because they found it impossible to compete profitably due to 2 the UFC’s anticompetitive scheme), as well as (b) a multifaceted scheme to impair and foreclose 3 competition by leveraging the UFC’s market dominance—including its tight-fisted control over 4 the supply of Elite Professional MMA Fighters—to block actual or potential rivals from accessing 5 inputs. Id. ¶ 9. 6 B. Procedural History 7 On June 4, 2015, the five above-captioned cases were transferred into this District pursuant 8 to an order transferring them from the Northern District of California. Plaintiffs and Defendant 9 filed a Notice of Related Cases in all five cases. ECF Order No. 101 at 2. 10 The Court summarizes the procedural history for the lead case, 2:15-cv-01045-RFB-PAL, 11 below: 12 On December 16, 2014, Plaintiffs filed their Complaint in the Northern District of 13 California. ECF No. 1. 14 On January 30, 2015, Defendant filed a Motion to Transfer case. ECF No. 31. 15 On February 10, 2015, Plaintiffs filed a Motion to Consolidate Cases. ECF No. 52. 16 On February 27, 2015, Defendant filed a Motion to Dismiss. ECF No. 64. 17 On June 2, 2015, the Northern District of California GRANTED the Motion to Transfer 18 Case to the District of Nevada. ECF No. 93. 19 On September 25, 2015, the Court held a hearing on the parties’ outstanding motions in 20 the various cases. ECF No. 186. The Court issued a minute order stating the following: 21 • Case no. 2:15-cv-01045-RFB-PAL 22 o Motion to Dismiss (ECF No. 64) is DENIED; 23 o Stipulation of Electronically Stored Information (ECF No. 160) is 24 GRANTED; 25 • Case no. 2:15-cv-01046-RFB-PAL, Motion to Dismiss (ECF No. 16) is DENIED; 26 • Case no. 2:15-cv-01055-RFB-PAL, Motion to Dismiss (ECF No. 39) is DENIED; 27 • Case no. 2:15-cv-01056-RFB-PAL, Motion to Dismiss (ECF No. 39) is DENIED; 28 • Case no. 2:15-cv-01057-RFB-PAL, Motion to Dismiss (ECF No. 16) is DENIED. - 4 - Case 2:15-cv-01045-RFB-PAL Document 314 Filed 10/19/16 Page 5 of 18 1 III. LEGAL STANDARD 2 A. Sherman Act, Section 2 3 1. Monopoly 4 Every person who shall monopolize, or attempt to monopolize, or combine or conspire 5 with any other person or persons, to monopolize any part of the trade or commerce among the 6 several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction 7 thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other 8 person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in 9 the discretion of the court. 15 U.S.C. § 2. 10 “To succeed on its claim for actual monopolization under § 2, [plaintiff] must prove 11 [defendant]: (i) possessed monopoly power in the relevant markets; (ii) willfully acquired or 12 maintained its monopoly power through exclusionary conduct; and (iii) caused antitrust injury. 13 Am. Prof'l Testing Serv., Inc. v. Harcourt Brace Jovanovich Legal & Prof'l Publications, Inc., 108 14 F.3d 1147, 1151 (9th Cir. 1997) (citing Movie 1 & 2 v. United Artists, 909 F.2d 1245, 1254 (9th 15 Cir.1990), cert. denied, 501 U.S. 1230 (1991)). 16 a. Monopoly power 17 “Monopoly power is defined as ‘the power to control prices or exclude competition.’ Mere 18 proof of exclusionary conduct is not sufficient to prove [defendant’s] dangerous probability of 19 success; other proof of market power is required.” Harcourt, 108 F.3d at 1154 (internal citations 20 omitted). 21 “Market power may be demonstrated through either of two types of proof. One type of 22 proof is direct evidence of the injurious exercise of market power. If the plaintiff puts forth 23 evidence of restricted output and supracompetitive prices, that is direct proof of the injury to 24 competition which a competitor with market power may inflict, and thus, of the actual exercise of 25 market power.” Rebel Oil Co. v. Atl. Richfield Co., 51 F.3d 1421, 1434 (9th Cir. 1995). “The 26 more common type of proof is circumstantial evidence pertaining to the structure of the market. 27 To demonstrate market power circumstantially, a plaintiff must: (1) define the relevant market, (2) 28 show that the defendant owns a dominant share of that market, and (3) show that there are - 5 - Case 2:15-cv-01045-RFB-PAL Document 314 Filed 10/19/16 Page 6 of 18 1 significant barriers to entry and show that existing competitors lack the capacity to increase their 2 output in the short run.” Id.

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